November 12, 2008

It is stated on the website of Financial Times that the processing of the application of Iceland about a loan from the International Money Fund (IMF) has been suspended for undefined time.

It is stated in the news article by David Ibson that it seems that the International Money Fund is chickening out on the help to Icelanders since they have not been able to get but half the loans that were expected to be in the help package to the Icelandic authorities from other countries. It says in the article that 500 million dollars are still needed to finance the rescue pack the application to the IMF relies on.

Icelandic authorities have made a deal about 2,1 billion dollar loan with the representative of the fund on October 24, but the board of the fund have decided to suspend the processing of the application from Iceland. It was planned that the application would be reviewed Thursday, November 6th. But it was delayed til Friday, then to Monday, and finally for undefined time.

Wouter Bos, minister of finance of the Netherlands, said yesterday in a conversation with the Netherlands television station Bos, that the Netherlands will not approve the loan from IMF to Iceland while there are conflicts about responsibilities of Iceland regarding the debet accounts in other countries have not been resolved. He says that the British and German agree with him.

November 10, 2008

IKEA index number by Stöð 2 has raised 47% since the product catalog from the Swedish store chain was distributed to the homes of the nation last year. It is unsure if the IKEA index number is a clue to the price raises on imported products is unclear – because the fall towards the Euro was 90% at the same time.

The bottom is about to fall out of the barrel when IKEA it self raises their prices. Every year the company has sent out the family friend IKEA catalog – and insures the prices in it for a year from the arrival to the homes. But now the depression breaks the law and yesterday IKEA announced price raises, average 25% raise.

Just as foreign market specialists have relied on the Big Mac index number – the IKEA index number by Stöð 2 a good clue to the price evolution in the country, specially how the prices of imported products from the euro area are likely to raise. But how much has the IKEA index number raised in a little over a year – since the catalog was sent out last year – and until the company was forced to pull the plug on the prices from the last catalog. Lets show an example.

Aril three seat leather sofa was last year 99900 ISK, is now 149900 ISK, and has raised almost 50% in a year. Linnarp book case raised from 29900 ISK to 49900 or 67%. Jonas desk raised from a little less than eleven thousand up to a little less than nineteen thousand, or almost 59%, Favorit 5 liter pot raised 56%, Nominell desk chair 25%, and finally Björnholmen media center raised from almost 40 to 50 thousand and raised 25%. So as we can see, the IKEA index number has raised by 47% in a little over a year, and the euro has raised by more than 90% towards the ISK.

November 4, 2008

Anders Fogh Rasmussen, prime minister of Denmark announced in his weekly press conference in Copenhagen today that they will send four F-16 fighter jets to Iceland next year for airspace protection.

The Danish are with this participating in a plan of NATO about airspace surveillance of Iceland. Posted by the Ritzau newsroom the Danish will be in charge of the surveillance the first three weeks in the first quarter of next year.

NATO agreed the airspace surveillance in July 2007 after the requests of Geir H. Haarde prime minister, who posted the request after the retreat of the American Navy base. The surveillance will be according to the decisions of NATO and will be every quarter of the year.

It was planned that the English would be doing the surveillance at the end of this year. On the other hand there have been thoughts to withdraw the surveillance to save money.

November 3, 2008

BT stores asked for petition in bankruptcy today. Hopes are that it will be possible to get BT up and running again, but it is obvious that the BT stores will be closed for now. There are 50 employees working for BT.

This is an announcement from the company:

“In the last few days and weeks we have paddled for the life of the company to insure the practice could continue in the form as we know it, but without satisfying results. The company has asked for petition in bankruptcy today, Monday.

There are hopes that it will be possible to get BT back up and running and discussions about the matter have already started. There is a signed acquisition offer of the practice of BT stores, but is subject to resolution of the liquidator.

It is obvious that the stores of BT will be closed for now while there is sought a result around the acquisition offer.

50 employees are working for BT stores, in 30 full-time equivalent unit. Staff meeting was held tonight and employees were informed about the situation and offered help to insure their rights.”

From today the noontime news broadcast of Stöð 2 is no more. Óskar Hrafn Þorvaldsson, news director of Stöð 2, says that social reasons are for this decision. The news will be sent out on the radio channel Bylgjan.

“This decision has been taken. It will stand while it stands.” says Óskar Hrafn. Possibly situations would change later so it will be possible to broadcast again in television.

The length of the noontime news will not change despite this change says Óskar.

(Translators input : Stöð 2 is a tv channel formerly owned by 365 media. A couple of days 365 media was sold because of serious financial situation. The buyer is Jón Ásgeir Jóhannesson, former Baugur chairman.)

October 31, 2008

Nýherji has now laid off 15 persons in Iceland and monthly pay for the rest of the staff will be reduced by 10%. The basic pay for employess with less than 300.000 ISK per month will stay the same.

In the announcement it states that the pay reduction will be effective from 1. february 2009. The pay segment of the job contracts will be cancelled in writing with 3 months notice. The pay of managers and CEO´s will be reduced by 10% effective 1. November.

There might be discussions with a few employees if they will consider a part time job to come up against the recession in their job area.

There will be serious restraint in finances in running Nýherji, and reduced funds in developement and all other expences will be reduced as possible, as the announcement states.

“The financial state of Nýherji is solid, and the company is moderately indebted, but it predictable that the difficult situation in icelandic economy could have an impact on the companies income and practice. The cost of pay is almost 80% of the companies expences, so it is essential to cut back. We want to act right now as this situation has unfolded.” Says Þórður Sverrisson, president of Nýherji.

The company chain of Nýherji are 20, both here in Iceland and abroad. The daughter companies in Iceland are TM Software ehf, Applicon ehf, ParX ehf, Sence ehf, Linkur ehf, SimDex ehf, Vigor ehf, Skyggnir ehf, Origo ehf and eMR ehf. Around 720 employees are in the chain, there of 550 individuals here in Iceland, and 170 overseas.